San Francisco 49ers win restraining order on $30 million in disputed stadium funds

SACRAMENTO -- The San Francisco 49ers on Tuesday scored their first victory in the team's fight with South Bay leaders to wrestle back $30 million in stadium funds, as a judge barred local school districts from spending the money and signaled he may soon give it to the team.

The decision to temporarily put the tax funds under lock and key follows an impassioned public debate over whether the redevelopment money should be used on the Santa Clara stadium or local schools. The judge presiding over the case set a July 27 hearing at which he may rule on the 49ers' claim that the team should get the funds because voters had earmarked the money specifically for the stadium.

"This is a powerful argument, and one that may prevail," said Sacramento Superior Court Judge Lloyd Connelly.

That would be a stinging defeat for a new oversight board made up of two Santa Clara officials and five officials from boards and agencies around Santa Clara County, from community college districts to the tax collector's office.

No one representing the board spoke at Tuesday's hearing, and the board has yet to hire an attorney.

"We're hoping that the oversight board will appoint counsel to better represent its interests," said Orry Korb, an attorney for the county auditor-controller's office who showed up to defend a county official named in the suit.

Advertisement

The saga began June 22, when the oversight board decided to snatch the funds in hopes of spending it on things like education, saying new state laws gave them control over all redevelopment funds. Some local officials hoped to spend the money right away before the Niners could appeal.

But the team last week filed an emergency lawsuit, arguing that Santa Clara voters approved the funds for the stadium in 2010, two years before the new redevelopment laws took effect.

Connelly ended Tuesday afternoon's hearing by granting the 49ers' request for a temporary restraining order to freeze the money for at least the next few weeks. The team and the oversight board will now fight over which group is the rightful owner of the funds, and Connelly could rule on the issue as soon as the July 27 hearing.

The team released a statement, calling Connelly's decision Tuesday "a step in the right direction."

"We remain optimistic that when the merits of the case are heard, the court will support the (voters') overwhelming decision," the 49ers said.

Connelly asked the team's attorneys if in the larger scheme of the $1.2 billion project, a loss of $30 million is "reasonable harm to this project?"

Replied Niners attorney Jonathan Bass: "It doesn't become ignorable simply by the fact that the (team) has other funds it can access."

Connelly said he was also concerned that the oversight board may have violated the Brown Act, the state's open-meetings law, saying its hasty decision to redirect the funds raised questions.

The funding is "of high interest to the community, and there was not a brief general description of, 'Hey, we're looking to terminate these contracts,' " Connelly said.

The team says the struggle over the money will not affect stadium construction in Santa Clara. The Niners broke ground in April and are expected to open the new field in two years.